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Endeavor Insight Spotlights Scaleup Ecosystems in Bangladesh and Uganda

As part of a series of reports focused on scaleup ecosystems worldwide, Endeavor Insight has analyzed the impact of scaleup companies on the economies of two emerging markets: Bangladesh and Uganda. Entitled “The Critical 5 Percent” (Bangladesh) and “The […]

March 24th, 2015 — by admin

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Endeavor Entrepreneur Company Enova Honored at the 2013 Tech Awards

Enova, an Endeavor Entrepreneur company, was honored with the Microsoft Education Award at the 2013 Tech Awards  this month in San Jose, CA. Founded by Endeavor Entrepreneurs Jorge Camil, Mois Cherem Arana and Raúl Maldonado, Enova brings technology-based learning to disadvantaged communities […]

November 21st, 2013 — by admin

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Endeavor Entrepreneur Emrah Kaya (Turkey) offers entrepreneurial advice, discusses his youth-focused venture

Emrah Kaya, Endeavor Entrepreneur and Founder of YouthholdingFeature below courtesy of the Founded Project, an online publication featuring interviews with rule breakers and risk takers from around the world to learn how they got started.

How much do you know about Turkey? Thirty-one-year-old Emrah Kaya believes the most important thing you should know is that 50% of the population is under the age of 29. Over the past decade, he’s created a mini-media conglomerate designed to focus on youth marketing, engagement and sales. In 2001, he launched Youthholding, which currently generates $10 million in revenues and employs 143 people. Along with Aslı Caner, Emrah was selected as an Endeavor Entrepreneur in 2010.

What is Youtholding?

Emrah: Youtholding is the umbrella name for a group of five Turkish companies specifically focused on developing marketing strategies that embrace the unique culture of young consumers. Our businesses are The UniClub, Youth Media, Eğitişim, Youth Research, and Firsatciyiz.com.

Five businesses dedicated to the Turkish youth market? Tell us about the opportunity you see.

Emrah: First, let me give you some context on Turkey: The population is 72.5MM; 51% is under the age of 29. Social media penetration is very high; we’re ranked 4th worldwide for Facebook usage. The youth marketing segment is valued at $50MM. So when you connect these dots, it becomes very clear that one of the most exciting and dynamic opportunities from a business perspective is harnessing the youth of Turkey. One of the gaps I saw back when I was in college was that traditional Turkish advertising agencies don’t really “get” how to connect and captivate young people.

What do you think the more traditional agencies in Turkey are doing wrong?

Emrah: They are still trying to reach the youth sector via TV, newspapers, print magazines, and radio.

But we know that for young adults and teenagers, TV commercials have transformed into viral videos; print-magazine ads will soon be replaced by interactive iPad apps; radio transmissions are out, and mobile messaging is the way forward.

So what is the vision of your youth media conglomerate?

Emrah: We want to be the hub for all youth-related marketing and create trends and social change for future generations in Turkey and beyond.

What are some of the most innovative businesses in your portfolio?

Emrah: The Uniclub: The first and biggest youth marketing company in Turkey; made up of 5,000 youth influencers on almost all university campuses (90 campuses in 64 cities).

Youth Research: Youth Research is the only research company that focuses entirely on young adults. We study the lifestyles, spending habits, buying behaviors and brand awareness of young adults through qualitative and quantitative projects on various ethnographic platforms.

Firsatciyiz.com: This is a youth-focused online sales channel. It has a unique e-commerce model that is formed according to young people’s buying behaviors through a demand-aggregator web platform. Sales prices are determined by the amount of demand generated within a given campaign period. For example, if 100 customers buy a specific product, the price will be discounted by 15%. If 250 people buy this product, the price will be discounted by 25%.

As a 31-year-old co-founder, what has it been like to build a business in Turkey?

Emrah: It can be tough in Turkey sometimes because most businesses are run by senior-level executives who will always try to prove the validity of their own opinions. You have to be comfortable challenging but also collaborating with the old guard.

Any advice you’d give young entrepreneurs?

Emrah: Try to sell something. No matter how small or silly it is, sell something.

When I was in college, a friend and I planned to launch a huge event on campus. We got some funding from Nescafé, but we severely under-budgeted for marketing expenses. We weren’t going to let the event flop, so we had to get creative—and entrepreneurial.

We decided to sell cheap finger cymbals outside of concert venues where Turkey’s “Prince of Pop,” Tarkan, would perform. These cymbals were a signature part of his music videos, so his fans really loved to see us after the show. We sold almost 5,000 and made US$19,000.

This experience ultimately inspired us to start our first business, The Uniclub, which leverages college students to serve as brand ambassadors.

My main advice is this: There’s no golden moment when you transform into an entrepreneur. If you have ideas, start bringing them to life.

A special thanks to the The Founded Project for conducting this interview.

Four Endeavor Entrepreneurs selected for Ernst & Young Entrepreneur of the Year Awards

Recently, Ernst & Young selected four Endeavor Entrepreneurs to receive 2011 Entrepreneur of the Year awards in several countries and categories. Ernst & Young began the Entrepreneur of the Year awards program in 1986 in a single Midwestern city; celebrating their 25th anniversary, the program has now expanded to 135 cities in 50 countries and presents awards to 900 of the world’s most innovative and successful entrepreneurs.

Learn more about the Endeavor Entrepreneurs selected:

2011 Ernst & Young Jordan Entrepreneur of the Year
Dr. Amjad Aryan: Pharmacy 1
Selected by Endeavor in 2009

Amjad has one clear goal: to turn Pharmacy 1 into the “CVS of the Middle East.” Recognizing the need for distinguished pharmaceutical health care and customer service in an environment characterized by a nonchalant attitude towards service and an antiquated view of the retail pharmacy profession, Amjad used his savings to open the first Pharmacy 1 in 2001 in Amman. Currently, the company is the leading retail pharmacy chain in the country, with over 45 branches, along with a branch in Saudi Arabia. The company has been able to capture a significant portion of the Jordanian market by basing its model around people, superior customer service, and solid business acumen.

For the Entrepreneur of the Year award, Amjad was selected from a competitive group of 12 Jordanian finalists representing nine companies. He will represent Jordan at the World Entrepreneur of the Year Awards, slated for June 2011 in Monte Carlo.

2011 Ernst & Young Entrepreneur of the Year: Brazil (Emerging category)
Daniel Wjuniski and Fernando Ortenblad: Minha Vida
Selected by Endeavor in 2009

In 2006 Daniel and Fernando founded Minha Vida, an online portal for health and wellness that includes a virtual library of more than 5,000 texts and guides written by physicians, medical associations, and universities. It has become the most popular portal for health and wellness in Brazil, with 6 million unique users per month and 10 million registered users. In 2010, its content was viewed by over 67 million people worldwide.

2011 Ernst & Young Entrepreneur of the Year: Argentina (Emerging category)
Adolfo Rouillon: Congelados del Sur
Selected by Endeavor in 2000

A serial entrepreneur, Adolfo won the Ernst & Young award for his Rosario-based company Congelados del Sur, which produces and markets frozen foods under the brand name Mondo Frizzata. Adolfo founded the company in 2007; that same year, Endeavor Argentina Board Member Eduardo Elsztain of CAP Ventures invested in the firm, marking the first time an Argentina-based VC fund invested in Argentine company.

Prior to Congelados del Sur, Adolfo co-founded Amtec, a leading Latin American software software company which specialized in the development of e-business solutions for medium to large companies. By 2000, Amtec was acquired by Neoris, the IT arm of Cemex (NYSE:CX). Neoris has become the fourth largest IT consulting firm in Latin America with clients such as Cargill, Dreyfus, OSDE and Novartis.

A warm congratulations to all four Endeavor Entrepreneurs!

Failure as Scar Tissue: Guest post by investor and serial entrepreneur Christopher Schroeder

Entrepreneur Chris Schroeder, founder of healthcentral.comNote: For more expert insights, consider registering for the June Endeavor Summit, where Christopher will be a featured speaker and panelist. You can also follow him on Twitter @cmschroed.

“Success is the ability to go from one failure to another with no loss of enthusiasm.”
– Winston Churchill

“Even when I’m on my back, I never back down.”
– Lil’ Wayne

It is well-baked into the narrative of American innovation and entrepreneurship that we not only accept but embrace failure. The greatest among us have failed repeatedly; the failures among us are merely waiting to fight another day. Whether the outright failure of our enterprises or the countless little failures that make up our days, a great entrepreneur is constantly learning from and pivoting around the sine waves of noble experimentations.

My favorite summary of Americans’ comparative attitude towards failure came appropriately from a very successful investor friend of mine who is French: “Failure here, unfortunately, is a blot on one’s honeur. But for you Americans, it is at most scar tissue. You take the sword, heal, and fight another day wiser and more strong!” Vive l’entrepreneur Americain!

There is no doubt that an acceptance of failure is part and parcel not only of the entrepreneurial ecosystem in the United States, but growing ecosystems around the world including Endeavor’s emerging markets and beyond. The narrative, though, belies one very salient fact:

Failure sucks.

It sucks beyond almost any human experience. It eradicates our resources, both financial and emotional; instills in us the malignancy of self-doubt; allows us to think too much about what other people say (or whisper to others behind our backs); and worries us that we have let down family, friends, employees, investors, partners and others who were so thrilled at our audacity to build. Future VCs SAY they respect you for failing, but many wonder –- or you are always wondering if they wonder — “does he or she have the stuff?”

This rather prosaic litany, of course, begs an obvious question: why do it?

And the answer is prosaically simple: because you have no choice. You simply have to.

Whenever I consider advising or investing in an entrepreneurial idea, I try desperately to keep the founder away from her pitch for a time and focus on who she is. What has she done in the past? Where does she come from? Why is she going down this path now? Why does she care?

But one of the most intriguing questions is: what will she do if her idea doesn’t work? It is not a trick question, nor do I labor long over it, but it gives a sense of the person’s mindset. The answer, “Failure is not an option, and here’s why,” shows a nice hint of audacity and commitment. “I’ll learn what could make the idea better and go at it again” shows a desire to win. “I can always get a job at McKinsey” may not be utterly damning, but certainly is an interesting thread on a potentially unraveling sweater.

Entrepreneurs have no choice. They seek no alternatives. They want their idea in their teeth. As often as not, this kind of independent, near fanatical drive in the face of statistically likely failure makes them unhirable in most “jobs” in other, larger, potentially safer organizations. And they don’t give a damn.

If you re-examine the litany of failure sucking above, I’d suggest the greatest take away is that it is almost entirely in one’s own head. Obviously we have to pay our bills. Certainly we don’t want our mothers worrying about us. Maybe, and depending on why we failed or how we handled it, it may be hard to get the next meeting in some quarters. But when we move away from the conspirators in our own heads, it is amazing how the passion and creativity that made us try in the first place helps us to find ways to meet the rent, allow our Moms to sleep at night, and find the team and investors who appreciate that the narrative of failure is true.

I received the best one-liner from a start-up founder recently, when he said, “I founded my dream on $1,060 and an amazing array of mistakes in the first iteration which taught me what to do in the second.” Incidentally, I loved that he didn’t round down the figure but added in that $60. It told me that to him, every dollar mattered. It wasn’t “around a thousand bucks”; it was to the buck. But the larger point was that he articulated what he had learned in his failure and embedded that learning into his next version. I understood why his idea was beginning to grow exponentially.

By the way, this entrepreneur is located in Alexandria, Egypt and to my knowledge has never visited the States.

A final thought: for the record, I’d appreciate someone acknowledging me as the first to connect a British Prime Minister to rap music…

Christopher M. Schroeder is a Washington, DC based internet investor and advisor, and CEO of internet companies including his most recent, healthcentral.com –- the leading collection of interactive experiences of health seekers sharing their experiences and inspiring actions. He has been spending extensive time in the Middle East exploring and writing about the rising entrepreneurial activity in the Arab world and thinks Endeavor is the smartest idea whose time has more than come.

Endeavor Turkey company Hiref unveils showroom in Qatar

Hiref's new showroom in Porto Arabia, The Pearl-Qatar

Endeavor firm Hiref, a Turkish luxury décor company, unveiled their new showroom in Qatar on April 14th. Founded by Endeavor Entrepreneurs Güvenç Kılıç and Ebru Çerezci, the brand draws inspiration from traditional Anatolian art and creates collections that aim to be both contemporary and timeless. Their collections have a new home in Porto Arabia, along with other international luxury design names such as Hermes and Giorgio Armani. The ambassador of Turkey to Qatar and his wife attended the opening.

Selected by Endeavor in 2009, Hiref’s opening in the The Pearl-Qatar marks continued international expansion for the brand. Hiref has retail locations in Ankara, Istanbul, and Jeddah, in addition to launching an online store. The handmade collections include vases, tableware, and mirrors crafted from fine metals, glass, and gemstones, preserving Turkish heritage and and capturing the world’s attention. JustLuxe.com called Hiref the “ultimate trendsetter of the ultimate design world” and the New York Times also mentioned the brand in an article about home design in Istanbul.

World Economic Forum publishes new report with Endeavor; highlights eight Endeavor companies

Today, in collaboration with Endeavor Global and Stanford University, the World Economic Forum released a new report, Global Entrepreneurship and Successful Growth Strategies of Early-Stage Companies. The report detailed insights from eight Endeavor Entrepreneur companies. Interviews with the Endeavor Entrepreneurs featured in the report have been reprinted on the Endeavor blog (DocSolutions, Globant, MercadoLibre, Petfor, Pharmacy 1, Refinancia, Technisys, and Yola).

The report found that the top 1% of companies from among 380,000 companies reviewed across 10 countries contribute 44% of total revenue and 40% of total jobs, while the top 5% contribute 72% of total revenue and 67% of total jobs. CLICK HERE to read the official press release; CLICK HERE to learn more and download the complete report.

“Understanding the elite few in their own ecosystem may prove a far more effective strategy than trying to replicate the success factors of other entrepreneurial hubs such as Silicon Valley,” said George Foster, Wattis Professor of Management and Dhirubhai Ambani Faculty Fellow in Entrepreneurship at the Graduate School of Business, Stanford University, and co-author of the report.

The report’s other co-author, Max von Bismarck, Director and Head of Investors Industries, World Economic Forum, said: “We hope that this report provides useful insights into the phenomenon of global entrepreneurship and will help to encourage and foster further high-impact entrepreneurs around the globe.”

“This report offers compelling proof that to drive economies forward, the key is not to generalize approaches for all entrepreneurs, but to focus resources on high-impact entrepreneurs – those innovators with the highest potential to scale,” said Linda Rottenberg, Co-Founder and CEO of Endeavor. Linda served on the report’s steering committee, with support from Shaun Young and David Wachtel from Endeavor.

Eight different growth strategies for early-stage companies are highlighted in the report, which features mini-case studies of seventy companies across 22 countries. Featured companies include the eight Endeavor-supported firms listed below. (To more easily locate the write-ups within the report [click here to download as a PDF], please refer to the page numbers in parentheses.)

DocSolutions (Mexico) (pp. 141-144; 32, 33) [link]
Entrepreneurs: Gabriel & Guillermo Oropeza

Globant (Argentina) (pp. 172-175; 18, 36) [link]
Entrepreneurs: Martin Migoya, Guibert Englebienne, Martín Umaran, Néstor Nocetti

MercadoLibre (Argentina) (pp. 205-208; 43, 151) [link]
Entrepreneurs: Hernán Kazah & Marcos Galperin

Petfor (Turkey) (pp. 326-328) [link]
Entrepreneur: Semih Yüzen

Pharmacy 1 (Jordan) (pp. 222-225; 24, 36, 46) [link]
Entrepreneur: Amjad Aryan

Refinancia (Colombia) (pp. 226-228; 16) [link]
Entrepreneur: Kenneth Mendiwelson

Technisys (Argentina) (pp. 351-353; 33, 36, 40) [link]
Entrepreneurs: German Pugliese Bassi & Mike Santos

Yola (South Africa) (pp. 257-259; 27) [link]
Entrepreneur: Vinny Lingham

Globant’s innovative solutions wow Google

Endeavor’s Argentina-based company Globant is keeping ahead of the technology curve. Featured recently in an article on Bloomberg.com, the IT outsourcing company has been unstoppable since its first collaboration with Google in 2006.

For a company that began as an idea in the back of a Buenos Aires bar in 2003, naming Google as a customer three years later was game-changing for Globant. In 2006, Google hired the IT outsourcing company to test their new Google Checkout software, essentially to try to break the complicated payment system and work out the kinks before it was released. Google’s Development Relations Manager, Patrick Chanezon, was so impressed by Globant’s elegant hacking and flaw-finding techniques that he invited one of Globant’s former engineers, Bruno Rovagnati, to give a presentation at Google’s Mountain View, California headquarters. The room was overflowing. Since then, Globant has become one of Chanezon’s go-to outsourcing partners and the Argentinean company is currently working on refining Google Chrome and the Android operating system.

According to the Bloomberg article, Martin Migoya, Globant’s chief executive and one of the four co-founders (along with Guibert Englebienne, Martín Umaran, and Néstor Nocetti — all Endeavor Entrepreneurs), explained how being able to count Google as a customer opened doors for their company; with the search engine giant’s endorsement, growth exploded. Globant now has over 1,400 employees (compared to 350 in 2006) and about 150 customers, including LinkedIn, MySpace, Electronic Art and JWT. Migoya notes that last year revenues totaled about $50 million and this year Globant is on target to hit $90 million.

To keep pace with the rapidly evolving technology and software industry, Globant is positioning itself as a provider of “long-term innovation management,” rather than as an individual project contractor. As noted by the Bloomberg article: “Architectural shifts in the basic platforms of the software industry ‘really changed the game of innovation and what kind of stuff you can build and in what time frame,’ says Google’s Chanezon. ‘Globant is well-positioned to be a strong player.'”

To its advantage, Globant was one of the first companies of its kind in Latin America’s growing IT outsourcing industry. They were early adopters of open-source technology, which can combine with proprietary software faster and more cheaply. It also aids in cross-polinating technology and helping their clients maintain an innovative edge. They are well equipped to suggest new ideas to customers that may not have looked outside their specific scope of development. The fact that they are in the same time zone as the United States and that all Globant employees are required to speak English help streamline the process and offer a competitive advantage over some of their counterparts in Asia.

Globant’s culture and process are instrumental in maintaining such a forward-thinking and adaptable company. When a new project comes into Globant, it is first introduced to 20 “gurus” in a brainstorming session, before being assigned to a team. Particularly tough challenges are thrown out to all Globant employees, expected to reach 3,000 in the next year, up 50 percent from 2010. Perhaps Globant’s most important quality for staying ahead of the technology curve is that they value creativity and flexibility. After participating in an Endeavor-led tour to Google’s Mountain View campus, Globant modeled much of their corporate culture (including industrial design, bean bag chairs and all) after Google, and like Google encourages their employees to spend 20 percent of their time doing whatever they want, to explore “technologies nobody is asking for yet.”

As the Globant motto has it, “We are ready.”

Endeavor Entrepreneur Federico Cella on his latest Uruguayan tech venture, Lynkos

This post is a translation of an interview that ran in Uruguayan newspaper El Pais, conducted by Stella Maris Pusino. In it, Endeavor Entrepreneur Federico Cella discusses his career as a serial entrepreneur, as well as his latest venture: Lynkos.

Federico, a 33 year old from Montevideo received a degree in Business Administration from ORT, studied at Exeter, and was Six Sigma Certified in Aveta Business Institute and in Managerial Development in IEEM. He began his career at Aiva, which his mother, Maria Noel Ache, founded. They were selected by Endeavor Uruguay as Endeavor Entrepreneurs in 2007. He started Lynkos with Endeavor Entrepreneur Gabriel Colla after leaving Aiva in 2008. Through Lynkos, Federico and Gabriel hope to revolutionize asset management and financial intermediation. Federico is married and enjoys playing soccer.

El Pais: You started your career at Aiva…

Federico: Yes. In 1994, I returned from the United States at the age of 19. I didn’t know what I would do, but I wanted to build something of my own. At that time, my mother, Maria Noel Ache, started Aiva with her partner, Carlos Parra, while they were also working full time at Blue Cross & Blue Shield (BCBS). So, I joined the new company, which started as an insurance broker, selling in Uruguay and Argentina.

El Pais: A more modest beginning than what it is now…

Federico: It was just a secretary and me, in Montevideo, and Sebastian, Parra’s son, in Buenos Aires. Over the years, as the company grew, I took on several roles, from operations in the beginning to Managing Director at the end. At age 22 I was traveling six or seven months a year, recruiting people or agents so that they would sell the products we represented. Our effort to develop the company commercially, and its ability to help stakeholders quickly reach those markets, produced a synergy, which simultaneously attracted more retailers and new markets. My mother and her partner, after selling BCBS Uruguay, began to participate actively in the company in 2009. As such, Aiva developed into what it is today, a large wholesaler of financial services that distributes not only personal insurance, but retirement and investment funds throughout Latin America — 400 different ones — from six worldwide companies: Skandia, Allianz, Old Mutual, American Fidelity, BUPA and Swiss Life, through about 200 insurance brokers, stock brokers, banks and financial planners. It grew from those initial three employees to more than 200 today.

El Pais: What are your average sales?

Federico: On average, about US$40 million per year. It’s been stable for the last three or four years. I cannot give more details because in the financial business confidentiality is very important. For Lynkos this is not an issue, so we can speak openly.

El Pais: So, what circumstances led to the creation of the new company?

Federico: It was a market opportunity, having an idea to address that opportunity, knowing people that supported that idea, and it was also a personal decision. I worked for over fourteen years in the family business. Even as a teenager I helped my mother at the office with my siblings during the summer. The family business has great dynamics in many ways, but it is also taxing in other ways and I wanted to get out of those dynamics. Today Aiva and Lynkos are two separate projects. I left the Board of Aiva in 2008 but I am still a partner, along with Carlos Parra, my mother, and others. I founded Lynkos at the beginning of 2009.

El Pais: And the initial goal was?

Federico: Lynkos is a technology company and unlike most technology companies in Uruguay, it focuses on products; it is not a company that develops customized software or sells technology consultancy services. Lynkos develops its products and sells them. During the first year and a half, between June 2009 and December 2010, we concentrated on developing the first version, with an internal team of ten people, and another forty outside of the office, twenty in Argentina and another twenty in Uruguay.

El Pais: But Lynkos is Aiva’s “child”, an evolution…

Federico: Only in part. My work at Aiva contributed to the idea of starting up Lynkos and its implementation. The work to develop Aiva commercially constituted its first strength, but its second strength was technology. It was not easy to manage the usage of so many products and to consolidate everything with distributors. The technology we developed at Aiva made our commercial development possible. Our success when compared to our competitors was mainly due to our technology development. Then the question came up: If this is so good for Aiva, why not offer it to others in the same business?

El Pais: It seems very simple….

Federico: There were also other promising factors. For instance, a group from Hong Kong approached us because they wanted to use it for their business in that region, but our platform was not ready for this. For starters, it was in Spanish. The market opportunity for Lynkos to flourish was the demand for tools that facilitate the development of distribution channels of companies in the financial sector, and, at the distribution level, the need for tools that allow for better service to the end customer, in an efficient way. Because, believe it or not, in the financial services industry there is a lot of paperwork trailing the processes from one place to another, generating duplication of work and unnecessary delays and mistakes, which end up increasing costs for the companies and slowing down the service. These were the premises we adopted for Lynkos, and there, we developed everything from scratch, targeting these technological shortcomings. We finished the first version of our platform in December and are selling it in many countries in Latin America and South East Asia.

El Pais: Who uses the new platform and how do they benefit from it?

Federico: Today our platform supports the products of Skandia, Allianz, Old Mutual, American Fidelity, BUPA and Swiss Life, and at the broker level, all those included in Aiva and others. Almost 300 organizations already use the product throughout Latin America. It allows insurance companies, retirement funds, and companies with investment funds to develop alternate sales channels and improve the profits in the existing ones; it allows transactions to be processed electronically therefore generating efficiency. It improves the operating processes of the sales processes, shortening lead times and resources, reducing or minimizing duplication of processes, and therefore, costs. It all adds up to better customer service.

El Pais: Does anything like Lynkos exist in the world?

Federico: Only in the United States and England. Nowhere else. And they are specifically focused on those markets. In the markets we operate in there is no competition, nothing similar. There are commercial challenges. Many insurance companies, for example, have their own technology departments that handle their own needs. Even though we do not compete with them, we often have to show them how Lynkos complements what they already do, without replacing their own platforms. In addition, a company can be connected to Lynkos very quickly, without lengthy implementation. In a month and a half they can be effectively using Lynkos. It’s a finished product that they can try before buying without a large investment, because the business model takes into account the cost of the individual user or transaction. If they want to discontinue using it tomorrow, they can do so without great financial loss.

El Pais: What’s the cost for the client?

Federico: Depends on the customer, on their size…a broker that has between 1,500 to 6,000 clients can have a cost of about US $1,500 a month; a carrier with 200,000 accounts is paying between US $15,000 and 20,000 a month, as long as they use it.

El Pais: How do you sell your platform?

Federico: We have a sales team in Uruguay; local technical and commercial partners in Chile and Hong Kong, and a third channel, the self-subscription, the small or medium broker that starts to use the system on their own by recommendation or through Internet search.

El Pais: How much do you expect to bill this first year?

Federico: Close to one million dollars.

El Pais: Based on your experience, what skills should an entrepreneur have?

Federico: First, an idea that motivates him, because to follow through with it means a lot of effort and experiencing many difficulties, uncertainties, fatigue and tension over time. Anybody can have a motivating idea. Second is not to be afraid of those challenges, and this has to do with personality. The ability to resist comfort and certainty and not fear failure.

El Pais: Do you have any critiques of the government in Uruguay?

Federico: One very strong one: the lack of communication and encouragement for young people to study and pursue careers in technology. Hundreds of accountants, lawyers and medical doctors graduate every year, while in the technology area there is zero unemployment. While pursuing their studies, students can find jobs in technology that in turn help them to continue studying. It is a virtuous cycle. They earn good money in an industry with a lot of upward mobility and flexibility, because they can work here or for foreign customers. They can even enroll and study for free- there is nothing stopping them. But young people are not aware of this.

Endeavor April 2011 newsletter

To view Endeavor’s April newsletter, a recap of all the top news stories from the previous month, please CLICK HERE.

Reminder: To receive our monthly newsletters by email, please enter your email address in the sign-up box at the bottom of our homepage.

Endeavor Entrepreneur Raul Polakof on how his tech firm overcame tough times, and his future growth plans

In a recent interview with the Latin American Venture Capital Association, Endeavor Entrepreneur Raul Polakof discusses the growth of his company Scanntech, how his company rode out the 2002 financial crisis in Latin America, and the importance of innovation. Scanntech is Uruguay’s leader in point of sale (POS) technology and develops and commercializes intelligent point of sale software (IPOSS) for medium to large retail companies.

Find the full LAVCA interview here.

LAVCA: What is your background and how did you come up with the idea for the company?
Polakof: After finishing University, Benny Szylkowski (currently a partner at Scanntech and head of sales) and I decided to start a business in retail technology. For years the company developed several innovative technologies, but when we were selected as Endeavor Entrepreneurs, they helped us realize that instead of inventing technologies, we should invent a solid business model. That is what we did and suddenly the company started growing and expanding.

LAVCA: Initially, Scanntech only sold cash registers, but the economic crisis in 2002 made you reevaluate your business model. Tell us a bit more about this process. What key decisions were made? Did you have mentors that helped in this process?
Polakof: Prior to 2002 we were doing pretty well exporting software to large retailers in Argentina. The Argentinean crisis started and several of our clients went bankrupt, and, either they did not pay, or they paid in “pesos” and not dollars. Then the crisis reached Uruguay, and by 2002 we were completely broke.
We had been working on a new business model and decided that it was the right time to implement it. We decided to focus on building the network of small retailers. At the same time, through Endeavor, we received invaluable advice from Rodolfo Oppenheimer and Enrique Baliño, former CEOs of McDonalds and IBM Uruguay respectively. They came to our company once a week and provided constructive criticism, which was extremely helpful.

It was a difficult time though. We couldn’t pay our employees’ salaries, and didn’t know if the company would survive, but we learned a lot. We made some big changes at that time. Instead of selling technology, we started to sell services and use our own technology as a SaaS company (the name SaaS didn’t exist at the time). Then we implemented a service where we called all of our partners once a month to check how we were doing. Today our customer satisfaction numbers are well above the industry standards. We also worked with our partners: small independent grocery stores, CPG suppliers, banks, financial institutions, cellular companies, government, etc. on ways to add value to their business and provide a better experience to their clients through this network of small independent stores (mainly bottom of the pyramid consumers), and it worked.

LAVCA: What sort of financing have you received thus far?
Polakof: We had a very successful and profitable business in Uruguay, but we needed additional funding to expand [to Argentina]. Since Uruguay is a very small country to raise the amount of money we were targeting, through Endeavor we met Austral Capital, a VC firm based in Chile. So it became an interesting mix: a Uruguayan company that raised money in Chile and was expanding in Argentina. Our first round was US$3 million, which we closed 10 months ago.

LAVCA: What is your most pressing strategic challenge right now?
Polakof: The transfer of knowledge and service culture. As we grow quickly in Argentina, continue expanding in Uruguay and start operations in Chile, our major challenge is passing know how and service culture to a rapidly expanding organization. We consider it key to our growth strategy because we build local teams and transfer the knowledge to them so they can run the business in their country so we can then focus on entering another country.

LAVCA: Are you looking for additional financing? If so, how do you plan to put your next round of financing to use?
Polakof: We’ve had a very good experience working with Austral Capital and will look to raise a second round of financing in order to expand to Brazil, where we already have grocery stores working with our systems. We will likely start actively seeking capital at some point in 2011.

LAVCA: Scanntech is already the leader in point of sales technology in Uruguay. Where do you see your company five years from now?
Polakof: We see ourselves with a greater presence in the rest of Latin America, as well as in the Asian market.

LAVCA: What advice would you give to other Latin American entrepreneurs and/or those in Uruguay specifically?
Polakof: Work hard on the business model; it is important that your company can add real value. Get a world class team, partner and set a culture with the right values. Once you have the right business strategy, it’s all about implementation and your people are to doing that successfully.

Forbes names two Endeavor Board members and one Investor Network member to its “Elite Eight” VCs to watch

Forbes and TrueBridge Capital Partners have named two Endeavor Board members and one Endeavor Investor Network member to its “Elite Eight” list of venture capitalists to watch.

The Elite Eight is a spinoff of Forbes’ and TrueBridge’s Midas List (of top venture capitalists) and highlights up-and-comers in the industry. The new list’s name takes its inspiration from the NCAA basketball tournament, in which unexpected, upstart teams often upset perennial favorites. While the Midas List utilizes a rigorous, quantitative model to identify its honorees, the Elite Eight employs a more qualitative approach, analyzing the industry at a macro level, looking closely at individual managers’ portfolios, and speaking with industry veterans.

Note: Blurbs below reprinted from Forbes.com.

Nick Beim
General Partner, Matrix Partners; Endeavor Global Board Member

Beim focuses on Internet and software investments for Matrix, historically among Boston’s finest venture firms but which recently planted big flags in Silicon Valley and New York. Beim, who opened Matrix’s Big Apple office early last year, was discussed frequently by the Midas List panel due to his investments in Gilt Groupe (the event-based online sales company that seems to be minting money) and TheLadders.com (the leading online destination for $100K+ jobs). JBoss, a company in which Beim invested just four years after becoming a venture capitalist in 2004, sold to RedHat in 2006 for $350 million. Like most of the others in our Elite Eight, Beim is still in his 30s, but is poised to find a place on the Midas List before long.

Jason Green
Founding General Partner, Emergence Capital; Endeavor Global Board Member

Green is a twin married to a twin, but has managed to build an investment portfolio that is anything but identical from others in Silicon Valley. After investing on behalf of established firms USVP and Venrock for over a decade, Green caught the entrepreneurial bug himself and co-founded Emergence Capital. The firm, which was an early investor in Salesforce.com, has focused on “cloud computing” since 2003, long before it was fashionable to do so. It’s paying off. Green earned big money on SuccessFactors, which went public in late-2007, and many believe Yammer, a Facebook-for-corporations that he backed in early 2010, could be a billion-dollar business. As these lofty plans come to fruition, Green – the elder statesman of the Elite Eight at just 44 – has a great shot at being on the Midas List for years to come.

Matt Cohler
General Partner, Benchmark Capital; Endeavor Investor Network Member

Cohler is among the youngest to hit our watch list. That’s fitting, since at the age of 31, he was the youngest non-founder to crack the general partner ranks of venerable Benchmark Capital when he joined in 2008 (Kevin Harvey was slightly younger when he co-founded the firm in 1995). Cohler was part of the founding team at LinkedIn, which recently filed for an IPO, and was one of the earliest hires at Facebook, where he was vice president of product management. He was recruited to Benchmark by Midas Lister #4, Peter Fenton, to beef up the firm’s presence in Web 2.0. He seems to be doing swimmingly, having invested in Asana (started by Facebook co-founder Dustin Moskovitz) and Quora (red-hot social “knowledge market”), among others. Cohler remains a special advisor to Facebook, which undoubtedly helps his already robust deal flow.

Cohler is a member of Endeavor’s recently-launched Investor Network. Designed to extend the reach of investors focused on emerging markets, the Investor Network connects leading investors with High-Impact Entrepreneurs and partners in emerging markets through tailored treks and services. The annual membership program aims to increase entrepreneurs’ access to smart growth capital and create an active global network of investors. The Network launched in February 2011 and kicked off its first trek in April, in Brazil. The next trek, Emerging Market Venture Day, will be in Silicon Valley on June 28 as a pre-conference activity for Endeavor’s Entrepreneur Summit.

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